Tablets continue to cannibalize PC sales

PC sales in the first quarter of this year suffered, and analysts are placing the blame on the tablet market and the disaster in Japan.

Global PC shipments dropped 3.2 per cent in the first quarter compared to the same period last year, according to industry analyst group IDC. IDC analysts called the decline the first contraction in the global PC market since the end of the recent recession.

Analysts at Gartner also reported a decline, but gave a smaller drop of 1.1 per cent.

"Weak demand for consumer PCs was the biggest inhibitor of growth," said Mikako Kitagawa, principal analyst at Gartner, in a statement. "Low prices for consumer PCs, which had long stimulated growth, no longer attracted buyers. Instead, consumers turned their attention to media tablets and other consumer electronics."

"With the launch of the iPad 2 in February, more consumers either switched to buying an alternative device, or simply held back from buying PCs," he added. "We're investigating whether this trend is likely to have a long-term effect on the PC market."

IDC noted that the firm had previously made a conservative forecast for the first quarter, predicting only 1.5 per cent growth in shipments. But their expectations ended up being too optimistic after businesses remained cautious about spending, consumers lost enthusiasm for PCs and the earthquake in Japan affected not only PC supplies but investments in PCs in that country, as well.

IDC analysts reported that they expect this sluggishness in the PC market to be the "norm for the time being."

"The U.S. and worldwide PC market continues to work through a difficult period that we expect will continue into the next quarter, but will start to improve in the second half of the year," said Bob O'Donnell, a program vice president with IDC, in a statement. "Slower than expected commercial growth in the first quarter failed to offset the ongoing challenges in the consumer market." IDC's parent company is IDG, which also owns Computerworld.

O'Donnell also said longer PC lifetimes and a lack of "compelling" new products also contributed to a slow down in PC buying. The tablets' effect on the PC market is also a growing issue.

Early last month, Gartner reported that with the highly popular iPad and now the iPad 2, in the market, consumers are losing interest in laptops.

Tablets are expected to have a large enough effect on the PC market that Gartner lowered its PC sales forecast for both 2011 and 2012. Gartner reported last month that global PC shipments are expected to hit 387.8 million units this year. That's a 10.5 per cent increase from 2010, but down from Gartner's previous projection of 15.9 per cent growth this year. It did not provide figures for 2012.

PCW Evaluation Team

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